Committee sends decision about passing along water rate increase to Council

By Martin Couch

Since Central Arkansas Water is raising its rates for wholesale water by eight percent, Bryant residents will absorb a slight bump in water rates.

"Basically, what they voted on was putting on an eight percent rate review with zero percent on the sewer fees," Bryant City Finance Director Gary Hollis said.[more]

Hollis made a model for the cash flow for the rate calculated out neutralizing the weather conditions and growth and development.

"It's a pure eight percent increase in water rate taking in the assumed and estimated expenses and seeing what it was, produces a good return," Hollis said.

The reason for the eight percent raise is because of the CAW increase. The rates are effective in January.

"The eight percent contract has been known for quite a period and is not a surprise," Hollis said. "What we would be doing is passing the rate increase onto the customer. We would need to also take the reason in the books in 2011 and bump them up to 2012, so we keep our rates as those rates that were originally set to provide debt service on the Arkansas Natural Resources initiative bonds to do the water tank and those important works in the sewer."

In short, the city can still fund its own projects.

"Why would that not be a better path to take than to serve ourselves up with far more money in the future?" Alderman Ken Green said. "The rate is gone, the 2.95 percent. Why wouldn't we stick with the rate increase and fund projects as much as we can out of pocket and still get the 2.95 percent interest rate?"

Green continued his comments by describing the past to the present.

"Stepping back, when we first did all of this we brought CRIST (Engineers, Inc., of Little Rock) in and we got to get the utilities and lights on," Green said. "We were also hearing at the time a whole lot of projects the city needs for opportunities in the future with its continued growth as we've seen in the past. Our marching orders were to put together a plan for the city. We had to go to the citizens to ask for a rate increase."

Green mentioned safeguards that were put in along the life of the ordinances.

"We safeguarded things we can change when we might over-bid on a project when the scope of the project might have changed," he said. "We put in safeguards to put in a review to do two things: the rates put into effect that year allowed us to stay in the black and continue those projects; and also a safeguard to protect the people we say we're going to do that for not one penny more. We did that.

"We came in because of project delays and amended that basically because CRIST did a review," he continued. "We went through a pretty lengthy process of saying what does this review entail. If we are going to do a review of an ordinance, what that does is get us all on the same page."

On a larger scope, the 20-year plan for the city of Bryant that was formed and approved by the City Council, is part of the consideration.

"We are looking people in the eye and hit you with a rate increase," Green said. "Here's what you are going to get. We did that. We fell behind again this year and I'm not going to throw rocks, but what this is saying is not where we stand today, but the overall implementation of the plan."

There was a motion made at the Finance and Personnel meeting on Wednesday by Green to receive the CRIST review.

"Until we hear that, I am not much in favor of messing with the plan until we hear that input," Green said.

There was a recommendation to send the issue on to the next City Council meeting.

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